Argo Blockchain’s Shares Up 100% As Miner Avoids Bankruptcy With $100M Deal

Shares in Argo Blockchain are up sharply in the UK and US after the bitcoin miner secured a $100 million bailout deal with Galaxy Digital. Argo will sell its flagship Helios mining facility to Galaxy for $65 million and receive $35 million in an asset-backed loan from Mike Novogratz’s firm.

Argos US-listed shares up 50% in Premarket Trading

Shares in Argo Blockchain surged more than 100% on the London Stock Exchange (LSE) on Wednesday after the beleaguered bitcoin miner struck a $100 million bailout deal with Mike Novogratz’s Galaxy Digital. Argos’ US-listed shares also rose significantly in pre-market trading, up 46.8%.

The deal will help Argo avoid seeking Chapter 11 bankruptcy protection after the mining company agreed to sell its Helios mining unit to Galaxy Digital for $65 million. Furthermore, Argo will receive a loan of 35 million dollars from Galaxy, which will be secured by the mining rigs.

“Over the past few months, we have been looking for a way to continue mining through the bear market, reduce our debt load, and maintain access to the unique power grid in Texas. This deal with Galaxy accomplishes all of these goals, and it allows us to live to fight a another day.”

– Peter Wall, CEO of Argo Blockchain.

Argo also agreed to a 2-year hosting deal with Mike Novogratz’s financial services firm that will allow the troubled crypto miner to continue mining at the Helios facility. Galaxy’s CIO and President Chris Ferraro said the deal aims to shore up Argo’s finances and capital structure.

Argo will use the proceeds from the Helios sale and the asset-backed loan to settle all existing debt, prepayment interest and other charges, including $84 million and $1 million owed by the firm to NYDIG ABL LLC and North Mill Commercial Finance, LLC, respectively. . After repaying the debt, Argo will receive about $6 million from an escrow account controlled by NYDIG ABL LLC. Argo repaid its $6.7 million debt to Galaxy Digital in November.

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Argos shares resume trading after a 24-hour suspension

The new transaction allows Argo to keep business operations afloat after the mining company failed to complete a $27 million financing deal in October. It also warned that it could have a negative cash flow, deterring new investors.

The move comes just a day after Argo requested a 24-hour suspension of trading in its US shares ahead of a major announcement that contains “inside information and includes forward-looking statements.” The company’s shares continued normal trading today.

Trading in the London-listed company was also halted earlier this month after the crypto miner accidentally published draft material that showed the firm had voluntarily filed for bankruptcy protection in the US. Argo played down the leak, saying it was in “advanced” talks with a third party to sell some assets and raise equipment financing.

Do you think Argo’s stock can recover its previous highs after stabilizing the business? Let us know in the comments below.

About the author

Tim Fries is the co-founder of The Tokenist. He has a B. Sc. in mechanical engineering from the University of Michigan, and an MBA from the University of Chicago Booth School of Business. Tim served as a Senior Associate in the investment team at RW Baird’s US Private Equity division and is also a co-founder of Protective Technologies Capital, an investment firm specializing in sensing, protection and control solutions.